Budget 2013: Cigarette prices to rise from 2014

THE price of a packet of cigarettes will rise by about seven cents from next year.

The increase will see the Government face a potential re-election tussle with tobacco companies and retailers, who are still smarting over plain packaging laws.

Cigarettes were the only sin tax targeted by Treasurer Wayne Swan's big-cutting Budget. Last year's Budget saw an increase on taxes on beer and cut the number of duty free cigarettes Australians could bring home after travelling overseas.

The duty free cuts last year were set to raise $175 million by 2015.

A packet of 25 cigarettes will be seven cents more expensive from the first half of 2014, after a change in indexation that sees tobacco excise keep pace with salary rises. Budget papers did not reveal how much this would raise.

While the Budget didn't contain any changes to how big betting companies are taxed, the Government did pledge to spend $ 5.4million over four years to establish and operate the Australian Gambling and Research Centre from July.

This will see the creation of an independent research body within the Australian Institute of Family Studies which will study the effects of gambling on the community and seek effective harm reduction strategies.